The National Insurance Commission (NAICOM) has announced a new Minimum Paid-up Share Capital Policy for insurance and reinsurance companies in Nigeria.
The revised paid-up capital requires life Insurance business operators to raise its capital from N2 billion to N8 billion; General business from N3 billion to N10 billion, while that of Composite business has been jerked up from N5 billion to N18 billion.
For Reinsurance business, the revised minimum paid-up share capital has also been reviewed upward from N10 billion to N20 billion.
This was contained in a circular issued Tuesday by NAICOM with Ref: NAICOM/DPR/CIR/25/2019, entitled “Minimum Paid Up Share Capital for Insurance and Reinsurance Companies in Nigeria.
The circular was signed for Commissioner for Insurance by the Director, Policy and Regulation Directorate, Pius Agboola and addressed to all insurance and reinsurance companies.
The Circular read:
“In 2005/2007, the insurance witnessed its last recapitalization and despite the astronomical increased in value in insured assets, consequent exposure to higher level of insured liabilities and operating cost of insurers, the same capital continued to rule in the insurance industry.
“In the exercise of the powers conferred on the Commission by the enabling laws, the minimum paid-up share Capital requirement for insurance and reinsurance companies in Nigeria is hereby reviewed.
“This circular shall apply to all insurance and reinsurance companies other than Takaful operators and microinsurance companies.
“The new minimum paid-up share capital requirements shall take effect from the commencement date of this circular for new applications while existing insurance and reinsurance companies shall be required to fully comply not later than June 30, 2020.
“The provision in respect of requirement of statutory deposit as stipulated in Part III, Section 10 of the Insurance Act 2003, shall apply on the effective date of commencement of this circular.
”All Insurance and Reinsurance Companies are required to ensure strict compliance with this circular. The commencement of this circular shall be May 20, 2019.”